Your Cancellation Process is Bullshit and it hurts your Company Image

I’ve tried unsuccessfully to cancel my eldest daughter’s Gymboree membership for the past three days.  Gymboree’s process to cancel is as follows:

  • Call the Gymboree location
  • They *email* you a form to print, fill out, and return
  • fill out that form, and either: 1) Turn it into that location, or 2) fax it into the number on the form

Once you cancel, they charge you an additional month for tuition.  Their service does not bill in arrears; it bills for that coming month. So, once you cancel, you are still paying for another month of service for a product you have cancelled.

And that’s if  they acknowledge that you’ve turned in the form on time.  You see, here’s how it goes:

  1. We got the form on Friday (1 August 2014).
  2. Emily filled it out and faxed it using HelloFax on Saturday.
  3. The fax number was disconnected.
  4. Hello Fax tries again automatically on Sunday; fax number is still disconnected.
  5. Emily emails it Sunday (3 August 2014).

We get billed today, 4 August, for 4-August to 4 September.

Now, We have not yet gotten confirmation of cancellation. That’s important, because if they receive it today, they’re going to charge us an additional month, effectively turning a 30 day cancellation into a 60 day cancellation (Since we’ll be charged for September as well):

Screen Shot 2014-08-04 at 9.07.09 AM

And that’s just the latest example of a company throwing roadblocks in a customer’s way in the name of profit.  Comcast was recorded doing something similar just a week ago. In an internal Comcast memo, the COO, Dave Watson, even says the process was put into place on purpose:

The agent on this call did a lot of what we trained him and paid him — and thousands of other Retention agents — to do,” continues Watson. “He tried to save a customer, and that’s important, but the act of saving a customer must always be handled with the utmost respect.

How a company deals with people who cancel is indicative of company culture. If they make canceling their service a ‘process’, they value profit over people.  Even some of the best companies have a bullshit cancellation process.
One of the companies I formerly worked for has (in my opinion) a terrible process for cancellation. You can sign up online; you can upgrade online, but if you want to cancel, you have to call a customer service number or email a customer service email that you aren’t guaranteed to get a response to.
If you call, you’ll likely have someone ask you if you’d like to downgrade or receive a discount to stay.  This is standard practice in the industry, and even Forbes puts it out as a ‘proven technique’:

4. Offer discounts to accounts before they churn. If you analyze your cohort retention rates, you might discover a certain timeframe that has an increased level of churn. Some products won’t have this — they’ll consistently churn out the same percentage every month. But if yours does, you can consider proactively and automatically offering discounts based on their continued usage. This is undoubtedly risky and should only be considered if you have some serious churn issues (which you should hope to eventually correct with product improvements). You should also make sure they have to jump through some minimal hoops to get the discount (like filling out a more in-depth satisfaction survey). Bonus points for driving them to tweet/like the fact that you just gave them an unexpected discount.
5. Require a reason for downgrades and cancellations. If you don’t know why a customer is leaving you, it’s really hard to figure out how to increase future satisfaction. And making the downgrade reason optional means most people will just skip it. Turn mandatory responses into direct tickets that your customer team can categorize and hopefully follow up on (just like they do with your satisfaction surveys). The right follow-up can often rescue a customer. Finally, the right language goes a long way too — be sure to communicate how important this information is to you and how much you appreciate the favor.

All of these things save money, but they lose Good-will, which is in infinitely shorter supply than Money is.
Put another way, if your company’s health depends upon you making it hard for customers to cancel, that’s a sign that you have a problem with your product. It could be many things, and some of them may even be out of your control, but punishing the paying customer for your product’s inadequacies reflects your company culture.
Netflix does it right, even in a competitive market where they’re fighting for their very existence:
Screen Shot 2014-08-04 at 9.42.08 AM
Two clicks, and my membership would be cancelled. No “You must fax/email/call our customer service department to cancel.”
There should be parity in your signup / cancellation process.  If I can signup online, I should be able to cancel online. It should be as easy as signing up. If it’s not, that indicates a cultural attitude that puts profits over people, and is that really the sort of company you want to give your business to?
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